Hansen v. Duvall

• Decision Date: 24 June 1933
• Docket Number: No. 30108.,30108.
• Citation: 62 S.W.2d 732
• Parties: G.M. HANSEN ET AL., Appellants, v. W.F. DUVALL ET AL.
• Court: Missouri Supreme Court

62 S.W.2d 732

G.M. HANSEN ET AL., Appellants, v. W.F. DUVALL ET AL.

No. 30108.

Supreme Court of Missouri, Division One.

June 24, 1933.

Appeal from Vernon Circuit Court. — Hon. C.A. Hendricks, Judge.

AFFIRMED.

McVey, Freet & Randolph, Hallett & Hallett and Roy W. Rucker for appellants.

(1) This is a suit in equity seeking the recovery of sums of money exacted usuriously and praying equitable relief through the annulment of the division order and the royalty deed. The court has jurisdiction over the persons of the defendants, and may enforce its decrees, even though the land is in the State of Kansas. 21 C.J. 150, secs. 131-2. (2) Plaintiffs are suing not only for sums of money paid but for the annulment of certain instruments founded upon an illegal consideration. Exhibit A is a contract for the payment of money. Section 2842, properly interpreted, includes things of value other than money. (a) A statute will not be given either an unreasonable or absurd construction. Stack v. General Baking Co., 283 Mo. 411. (b) In construing statutes, it is permissible in determining the intent of the lawmaker to either expand or limit the meaning of certain words when it becomes necessary to make the law harmonize with reason. St. Louis v. Christian Bros. College, 257 Mo. 552; State ex rel. v. Moneyham, 212 Mo. 580; Kerens v. Trust Co., 283 Mo. 622; Langdon v. Kleeman, 278 Mo. 243; State ex rel. v. McQuillen, 246 Mo. 534; Straughlan v. Meyers, 268 Mo. 588; Strotman v. Railroad, 211 Mo. 251. (c) Section 2842 prohibits the taking of anything more than the legal rate of interest for the loan of money, and includes the taking of things of value other than money. Bank v. Owens, 2 Peters, 527; Davisson v. Smith, 60 W. Va. 413, 55 S.E. 466; Cummins v. Wise, 6 N.J. Eq. 72; Vilas v. McBride, 17 N.Y. Supp. 171; Webb on Usury, secs. 25, 29; 27 R.C.L. 224; Reynolds v. Carter, 12 Leigh, 469. (d) A consideration exacted in violation of positive law cannot furnish support for a contract, whether the act be malum in se or malum prohibilum. Howell v. Ins. Co., 215 Mo. App. 392; 13 C.J. 424. (e) The right of action given by the statute is in the nature of an action for money had and received, under which the ad damnum is for money, although the subject-matter need not have been money. 41 C.J. 12; Banking Co. v. Commission Co., 195 Mo. 288; Mudd v. Morris, 213 Mo. App. 485; Houx v. Russell. 10 Mo. 246; Davis v. Krum, 12 Mo. App. 286; Gordon v. Bruner, 49 Mo. 570; Coughlin v. Sullivan, 24 Mo. 533. (f) Where there has been a conversion into money, an action for money had and received will lie. 41 C.J. 33; 1 C.J. 1033-4-5; Vreeland v. Vreeland, 56 Atl. 1089. (3) The Usury Statute is to be liberally construed. Central Mo. Trust Co. v. Smith, 213 Mo. App. 110; Tobin v. Neuman, 271 S.W. 842; Mo. Discount Corp. v. Mitchell, 261 S.W. 743; Martin v. Claxton, 308 Mo. 321. (4) This case is governed by the law of Missouri, since that is the State in which the contract was executed and where performance was had. Trower Bros. v. Hamilton, 179 Mo. 205; Royal Loan Assn. v. Forter, 68 Kan. 468; Midland Saving & Loan Co. v. Soloman, 71 Kan. 185; 39 Cyc. 905. (5) Under the Missouri Law an action may be maintained to recover usury. Sec. 2842, R.S. 1929; Long v. Abstracting Co., 252 Mo. 167; Whiteworth v. Davey, 185 S.W. 242; Major v. Putney, 293 S.W. 81. (6) The law against usury is founded on principles of public policy. Kreibohm v. Yancey, 154 Mo. 85; Sherwood v. Roundtree, 32 Fed. 124; 13 C.J. 412; 27 R.C.L. 203. (7) A debtor who makes payment of usurious interest comes into equity with clean hands. Bell v. Mulholland, 90 Mo. App. 620; Bexar B. & L. Assn. v. Robinson, 14 S.W. 227; Mo. R.E. Syndicate v. Sims, 179 Mo. 679; Webb on Usury, sec. 461; Hansen v. Bank, 69 N.W. 202. (8) The so-called Duvall guaranty agreements were without legal force. The mortgage instruments did not convey to the mortgagees any rights under an oil lease not in existence, nor to undiscovered oil. The rights of the parties are to be determined under the division order. (a) Oil is not property in the sense that minerals in place are property. An oil and gas lease conveys no present vested interest in undiscovered oil and gas. Marrs v. City of Oxford, 24 Fed. (2d) 541. (b) A mortgage is nothing more nor less than security for a debt. Leather Co. v. Ins. Co., 131 Mo. App. 701; Trust Co. v. Ransdall, 305 Mo. 54. (c) A note and deed of trust are two separate instruments, and the note is not controlled by recitations in the deed of trust, not included in the note. Owings v. McKenzie, 133 Mo. 334; Lawson v. Spencer, 81 Mo. App. 169. (d) The owners of the land had the right to execute the oil lease irrespective of the mortgage. Oil is personalty and not covered by the mortgage. Marrs v. City of Oxford. supra. (e) In 1924, when the mortgages were executed, oil had not been discovered, and there was no oil lease. There was nothing to assign. A mere possibility, coupled with no interest, is nonassignable Bell v. Mulholland, 90 Mo. App. 619; Rutherford v. Stewart, 79 Mo. 216. (f) The representations of Duvall and his acts must be attributed to his principals. Western Storage & Warehouse Co. v. Glasner, 169 Mo. 38. (9) Defendant W.F. Duvall's plea of agency and service is a mere cover for his usurious exactions. Bank v. Ins. Co., 218 N.W. 949; Cammack v. Runyan, 299 S.W. 1923. (a) It is immaterial whether the contract, Exhibit A, is to be construed as the personal contract of Duvall or the contract of the Duvall Trust Company. Western Storage & Warehouse Co. v. Glasner, 169 Mo. 38; Gordon v. Andrews, 2 S.W. 813; Jacobs v. Hester, 240 Pac. 952. (b) The burden of proof rests upon defendants to prove Duvall's alleged agency for Hansen, and the law frowns severely upon a claim of dual agency, 2 C.J. 448-9, sec. 47, p. 712, sec. 367; De Steiger v. Hollington, 17 Mo. App. 388; Meyer v. Company, 179 Mo. App. 695; McClure v. Ullman, 102 Mo. App. 704; Neuman v. Friedman, 156 Mo. App. 142; Corder v. O'Neill, 207 Mo. 632. (c) The entire transaction was a loan by Duvall or the Duvall Trust Company, and a readjustment of the security. There was no service performed for the borrower. O'Toole v. Meysenberg, 251 Fed. 191; Hain v. Mortgage Co., 254 Pac. 956; Gage v. Mercantile Co., 160 Fed. 425; Munn v. Motor Co., 228 Pac. 150; Ringer v. Virgin Timber Co., 213 Fed. 1008. (d) The compensation claimed by Duvall is grossly excessive and the plea of service is a mere cover for usury. Bonus v. Trefz, 2 Atl. 1369; Harmon v. Lehman, 2 L.R.A. 594; 21 A.L.R. 748. (10) It is immaterial whether Duvall acted as principal or as agent of the lender. He was not the agent of the borrower. Western Storage & Warehouse Co. v. Glasner, 169 Mo. 38. (a) Commissions or brokerage in excess of legal interest, and by whatever name, will be usurious. (b) If an agent would bind his principal only it is his duty to disclose him. When he fails to do so, it must be taken that he intends to bind himself. Hamlin v. Abell, 120 Mo. 198; McClellan v. Parker, 27 Mo. 162. (c) The Duvall Trust Company accepted a contract made by W.F. Duvall and acted thereunder. When a principal accepts the contract of his agent, he must accept it as a whole. Porter v. Woods, 138 Mo. 552. (11) The judgment cannot stand because the referee was appointed before the pleadings were made up. 34 Cyc. 793, 819; 21 C.J. 606 and note 23; Bader v. Schult, 118 Mo. App. 27. (12) Defendants represented that they had authority to execute the releases and the releases were executed. They are stopped from denying the effect of their contract. McFarland v. McFarland, 278 Mo. 17; Fox v. Windes, 127 Mo. 512; Lingenfelder v. Leschen, 134 Mo. 63; Eccles v. Shipping Co., 21 Fed. (2d) 654; Bankers v. Tolmie Bros., 243 Pac. 355; Myers Tailoring Co. v. Keeley, 58 Mo. App. 495; Cruze v. Eslinger, 235 S.W. 498; Porter v. Merrill, 138 Mo. 559; Lewis v. Fisher, 167 Mo. App. 676; Haskett v. Unsell, 181 Mo. App. 485; Banjo v. Wacker, 251 S.W. 458; Hamlin v. Abell, 120 Mo. 198; Furniture Co. v. Crawford, 127 Mo. 364; 2 C.J. 468; 21 C.J. 1110, 1111.

J.A. Silvers and D.C. Chastain for respondents.

(1) The petition does not state a cause of action. (a) The court has no jurisdiction of the subject matter. State ex rel. Hunt v. Grimm, 243 Mo. 667. (b) Voluntary payments of usury cannot be recovered except under Section 2842, R.S. 1929; Flinn v. Mechanic's Building Assn., 93 Mo. App. 444; Murdock v. Lewis, 26 Mo. App. 234; Peters v. Lowenstein, 44 Mo. App. 406; Ferguson v. Soden, 111 Mo. 208; Bank v. Haseltine, 155 Mo. 61. (c) Recovery under Section 2842, is by the terms thereof limited to sums of money paid and this does not include other species of property. 36 Cyc. 1108; State v. Woodside, 112 Mo. App. 455; Tobin v. Neuman, 271 S.W. 842; Tiffany v. Natl. Bank, 85 U.S. 862; United States v. Van Auken, 96 U.S. 366; Secs. 655, 9977, R.S. 1929; Howey v. Cole, 219 Mo. App. 34, 269 S.W. 955; Dworkin v. Ins. Co., 285 Mo. 342, 226 S.W. 846; Grier v. Ry. Co., 286 Mo. 523, 228 S.W. 454; State ex rel. v. Grinstead, 314 Mo. 55, 282 S.W. 715. (d) Plaintiffs' cause of action, if any, is in law and not in equity. Long v. Greene County Abs. & Loan Co., 252 Mo. 158. (2) There was no usury in the transaction. (a) The burden is on the plaintiffs to prove usury by a clear preponderance of the evidence, usury is never presumed. Tobin v. Neuman, 271 S.W. 842; Mo. Discount Corp v. Mitchell, 216 Mo. App. 100, 261 S.W. 743; General Motors Acceptance Corp. v. Weinrich, 218 Mo. App. 68, 262 S.W. 425. (b) And plaintiffs must also establish a usurious intent, 27 R.C.L. 208-221; 39 Cyc. 897; Lloyd v. Scott, 4 Peters, 205; Tobin v. Neuman, 271 S.W. 842; Allen v. Newton, 219 Mo. App. 74, 266 S.W. 327; Call v. Palmer, 116 U.S. 98, 29 L. Ed. 559, 6 Sup. Ct. 301; Houghton v. Burden, 228 U.S. 161; McRacken v. Bank, 49 A.L.R. 1044. (c) The arrangement was personal with W.F. Duvall and he became for the purpose the agent of...